A weak recovery on the cards

The market closed in the green, but off the highs, as the finance minister clarified there was no cause for concern about the tax residency certificates. A weak recovery is on the cards as the market is trying to form a base. The National Stock Exchange (NSE) recorded a volume of 74.55 crore shares and advance-decline ratio of 688:817.

The market, which plunged over 1.5% yesterday, opened in the positive this morning as investors picked up stocks at lower levels. In the international arena, the US markets ended with minor losses on Thursday as US investors were seen awaiting the outcome of a meeting of policy makers to avoid fresh taxes and spending cuts. A fall in China’s factory growth in February led the Asian markets lower in morning trade today.

The Nifty opened nine points up at 5,702 and the Sensex started off at 18,877, a gain of 15 points. Profit booking in early trade pushed the benchmarks into the negative for a short while to touch their intraday lows. At the lows, the Nifty fell to 5,680 and the Sensex went down to 18,821.

However, buying in capital goods, power, metal and consumer durables stocks helped the market recovered from its lows. The market remained in the positive for the remainder of the morning session boosted by a report of an uptick in manufacturing activity in February. The HSBC India Manufacturing Purchasing Managers’ Index (PMI)—a measure of factory production—stood at 54.2 in February.

A clarification from the finance minister that the status tax residency certificates (TRCs) held by foreign investors remains unchanged from last year, saw the market getting a further boost in post-noon trade. The news resulted in the indices hitting their highs with the Nifty at 5,739 and the Sensex touching 18,989.

The market closed off the highs as investors analysed the budget proposals announced by the finance minister on Thursday. The Nifty settled 27 points (0.47%) higher at 5,720 and the Sensex finished the session at 18,919, a gain of 57 points (0.30%) over its previous close.

The broader indices witnessed a mixed close, as the BSE Mid-cap index gained 0.29% 2.46% while the BSE Small-cap index fell 0.18%

The top sectoral gainers were BSE Consumer Durables (up 3.20%); BSE Capital Goods (up 1.62%); BSE Auto (up 1.50%); BSE Power (up 0.80%) and BSE Metal (up 0.63%). The losers were BSE 3.93%); BSE TECk (down 0.22%); BSE Fast Moving Consumer Goods (down 0.09%) and BSE Oil & Gas (down 0.04%).

Sixteen of the 30 stocks on the Sensex closed in the positive. The main gainers were Maruti Suzuki (up 4.98%); Jindal Steel and Power (up 2.87%); Bajaj Auto (up 2.63%); Larsen & Toubro (up 2.51%) and Cipla (up 2.40%). The main losers were Bharti Airtel (down 3.89%); Dr Reddy’s Laboratories (down 1.44%); ITC down 1.42%); Hero MotoCorp (down 1.30%) and TCS (down 1%).

The top two A Group gainers on the BSE were—Core Education Technologies (up 18.78%) and Suzlon Energy (up 18.07%).

The top two A Group losers on the BSE were—NHPC (down 10.56%) and DLF (down 6.25%).

The top two B Group gainers on the BSE were—MVL Industries (up 19.88%) and Gujarat Themis Biosyn (up 19.87%).

The top two B Group losers on the BSE were—Shri Lakshmi Cotsyn (down 19.97%) and Gennex Laboratories (down 19.17%).

Of the 50 stocks on the Nifty, 29 ended in the green. The key gainers were Maruti Suzuki (up 5.28%); Jaiprakash Associates (up 4.82%); Reliance Infrastructure, BPCL (up 3.51% each) and Power Grid Corporation (up 3.50%). The key losers were DLF (down 5.97%); Bharti Airtel (down 3.44%); IDFC (down 2.18%); Siemens (down 1.79%) and Cairn India (down 1.58%).

Markets across settled mostly in the positive on reports of a fall in Japanese consumer prices fell for the third straight month in January leading to speculations that the country’s central bank will initiate new measures to control deflation. Markets in China settled lower on reports of a fall in manufacturing activity last month.

The Jakarta Composite rose 0.33%; the Nikkei 225 gained 0.41%; the Straits Times added 0.05% and the Taiwan Weighted surged 0.84%. On the other hand, The Shanghai Composite fell 0.26%; the Hang Seng dropped 0.33% and the KLSE Composite shed 0.01%. The Seoul Composite was closed for trade today on account of a local holiday.

At the time of writing, the key European indices were trading with losses between 0.31% and 1.16% and the US stock futures were in the negative, indicating a lower opening for US stocks later in the day.

Back home, foreign institutional investors were net sellers of shares of a huge Rs1,317.79 crore on Thursday on account of the finance minister’s comments about tax residency certificates held by foreign investors. On the other hand, domestic institutional investors were net buyers of shares totalling Rs 417.94 crore.

Internet firm Info Edge, which owns job portal Naukri.Com, today said it has acquired software developer MakeSense Technologies for Rs8 crore. The latter has developed proprietary software for semantic search, which will augment search capabilities for both recruiters and job seekers, principally on the company’s portal Naukri.Com. Info Edge gained 1.89% to close at Rs354.95 on the NSE.

The Competition Commission of India has approved the proposed acquisition of a majority stake by the UK-based Diageo in UB group’s United Spirits. It said the deal would not have an adverse impact on competition. United Spirits climbed 1.85% to close at Rs1,874.10 on the NSE.

Karnataka Bank has increased interest rate on deposits by 25 basis points on all fresh retail term deposits of 1-2 years maturity period. The rate of interest on deposits has been increased from 9% to 9.25% with effect from 1^st March. The stock declined 2.89% to close at Rs135.85 on the NSE.